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- Dianne Hai Ha
A lot of people talk attract and tease new Forex traders by appealing to their senses such as greed, fear and desire for increased leisure. These are easy marketing techniques but are very misleading when it comes to Forex trading. Admittedly, buying and selling currencies in the Forex market is so simple its merely a matter of clicking a mouse button. However, that is where the easy part stops. Everything in Forex is timing and that is what one must understand.
Forex robots appeal to new traders because of the ease of execution and overall lack of effort required. But, this is the lazy mans game and it will far too frequently end in disaster. The appeal to traders dislike of spending hours in front of the computer is why so many new systems tout Mega profits in just 30 minutes a day. It has been said many times in the past, but if this were true then everyone would be involved in trading. The fact is, it is not true and if you are able to spend just 30 minutes a day trading Forex and succeed that is as much due to fortune (aka luck) as it is skill.
I am not saying that you cannot make money in 30 minutes. On the contrary, many times you can get a trade that gives you 20, 30 even 50 pips or more in just a few two minute candles! It is possible to make fast money in the Forex. What you need to understand is, that there is no correlation between the time you spend trading (looking at your screen) and your profitability. What is critical is not how much time you spend but what you can and are able to do with that time.
I have found through my own experimentation that, indeed, the more hours I spend trading does not at all necessarily equate into greater profits in the Forex market. On the contrary, when I have traded a full day (say from UK open to noon EST 8 hours) I have found that more often than not, I tend to either give back much (if not all) of my profits I acquired early on or even go so far as end down on what would otherwise be a successful trading day had I stopped after just a couple hours. I feel that it is easy to become embroiled in longer trades with more and greater leverage when you trade long hours than if you confine yourself to a shorter trading period. When you give yourself a specific amount of time to trade knowing that you must complete the trade (win or lose) in say two hours time. Under these circumstances, one often makes more crisp and disciplined decisions.
I feel that this is true but it doesnt not mean that you can just spend half an hour and bank big profits. On the contrary, you should give yourself enough time to see a trade through to fruition. That can be anywhere from 2 mins to 4 hours. Although, I would caution staying in a trade for more than 2 hours unless it was a planned, longer term trade where your risk is contained in some way (either via a proper stop loss at BE, or if perhaps you are letting the second half of your trade run). One must know that the longer a trade is on the more unknown factors creep into play. Things change and risk increases the longer you are in any one single trade. I know a number of very experienced and successful traders who use time stops taking themselves out of a trade automatically when something does or doesnt occur within a given time frame (often just 10 or 20 minutes).
In the end, realize that ending the day in the black (even up 10 or 20 pips) is a huge achievement. If Forex trading is an augment to your current salary then steady as she goes. Never get greedy and trade to satisfy your psychological needs. Pay strict attention to your body and your mind as well as your trade as time progresses. Trading over and over will not necessarily yield more profit. Give yourself enough time to find a trade and then let that trade run its course keeping in mind the limits of both the market and your own stamina. Often, it is as good to take a 30 or 40 pip win and walk away from your trading station as it is to exult in your trading prowess after such a win and keep bearing down on the market for more. Give yourself time limits and parameters on your trading. Keep in mind the market cant be forced. During your trading time there will not always be good trades, so dont trade just for the sake of trading.